Less than 40 per cent of software installed on computers in China was pirated in 2011, a decline of 3 percentage points from the previous year, according to Chinalabs.com, a consulting and research company.

The software piracy rate dropped from 41 per cent in 2010 to 38 per cent last year, the seventh year that the figure declined, according to data released by the company, entrusted by the State Intellectual Property Office, yesterday.

As for categories, information security software piracy declined the most - from 45 per cent in 2010 to 39 per cent last year - followed by office and operating system piracy, according to the annual report on China's software piracy, conducted by the company.

"China's software piracy rate has been continuously decreasing over the past seven years, which can be seen as a big victory of authorised software across the country," Wang Junxiu, founder of the company, told China Daily after the news conference of the report.

The company has cooperated with the office for nearly 10 years by helping the government agency analyse the development of the Internet and crack down on pirated software, Wang said.

"It can be said that our company and the office has built up a long-term mechanism to regulate the software market," he said. "Our provided statistics have become important references and given clearer direction as the administration launched crackdowns."

The rate of licensed software reached 20 per cent last year, according to the report.

As of the end of January, authorised software was being used on all computers of governmental departments in eight provinces and municipalities, including Beijing, Shanghai and Jiangsu, said Zhai Lifeng, an official of National Copyright Administration.

licensed software has been popular in large and medium State-owned enterprises in sectors such as tourism, insurance and banking, Zhai said.

In the meantime, 1,148 cases involving online pirated software were investigated during a campaign launched by the administration, the Ministry of Public Security and the Ministry of Industry and Information Technology in 2011.

"We've given administrative punishment to 466 individuals and companies, while 66 cases were transferred to the judicial department for criminal investigations," she added.

As the piracy rate declines, the price of some licensed common software is rising rapidly, which may tempt some people to return to piracy, said Wang Weihua, an officer of the consulting company.

He used Office, a famous programme designed by Microsoft Corp, as an example. The price of Office 2010, common software issued by the corporation last year, went up to 3,349 yuan ($529) from the 2007 version's 2,352 yuan.

However, Lei Ting, a senior officer of Microsoft, said the software deserves a higher price.

"The software is designed through our employees' wisdom and endeavours. The product deserves that price, and I don't think the price is the major hurdle to the campaign of promoting licensed software," she said.

The most important issue is how to establish consumers' awareness of protecting the rights of authorised software, she added.

In addition, because many netisens and software users are from villages and small cities, they have poor awareness of intellectual property rights. Therefore, "it is urgent for the government to educate and guide", said Gao Hongbin, CEO of Chinalabs.com, who is also a pioneer specialising in software research in China.